Stamp Duty Transfer of Ownership

Islandguy

Hello

Not sure if this subject matter has been raised before so apologies if it has. 

My ex partner and I purchased a flat in 2021 for investment purposes. We paid the higher rate of Stamp Duty as we both have our own properties. We are listed on the title as joint tenants (equal shares). 

My new partner has shown an interest in buying the flat. He has a Mortgage offer and to keep repayments affordable, he is going to purchase a 75% share and I will retain a 25% share. My ex partner will no longer have an interest in the flat. My name will be on the Mortgage and we will hold the property as tenents in common in unequal shares. We are going to sign a deed of trust to safeguard my interest. I will continue to reside in my own property. 

What Stamp duty, if any, is payable in this scenario?

Thanks

Bookworm105

the mortgage counts as "chargeable consideration" and therefore. if above the SDLT threshold (*) it will be the value used for SDLT
presumably new  partner owns another property, so (*) additional rate and threshold SDLT will again apply

Islandguy

Bookworm105 said:

the mortgage counts as "chargeable consideration" and therefore. if above the SDLT threshold (*) it will be the value used for SDLT
presumably new  partner owns another property, so (*) additional rate and threshold SDLT will again apply

New partner does not own another property. 

Islandguy

I don't know if this is relevant but flat is being sold for £220000. Mortgage is for £165000. I retain a 25% in the flat (£55000). New partner will live in flat as primary property, no other property owned. 

SDLT_Geek

Islandguy said:

Hello

Not sure if this subject matter has been raised before so apologies if it has. 

My ex partner and I purchased a flat in 2021 for investment purposes. We paid the higher rate of Stamp Duty as we both have our own properties. We are listed on the title as joint tenants (equal shares). 

My new partner has shown an interest in buying the flat. He has a Mortgage offer and to keep repayments affordable, he is going to purchase a 75% share and I will retain a 25% share. My ex partner will no longer have an interest in the flat. My name will be on the Mortgage and we will hold the property as tenents in common in unequal shares. We are going to sign a deed of trust to safeguard my interest. I will continue to reside in my own property. 

What Stamp duty, if any, is payable in this scenario?

Thanks

Islandguy said:

I don't know if this is relevant but flat is being sold for £220000. Mortgage is for £165000. I retain a 25% in the flat (£55000). New partner will live in flat as primary property, no other property owned. 

Some more information would help.  The flat is in England, so the relevant stamp duty is stamp duty land tax?

You own the other property you live in and will keep that one and remain living in it?

The transaction is being treated as a sale of the whole flat for £220,000 with:

• Your ex and you together being the seller?
• Your new partner and you together being the buyer?

That is required by the lender?

Islandguy

SDLT_Geek said:

Islandguy said:

Hello

Not sure if this subject matter has been raised before so apologies if it has. 

My ex partner and I purchased a flat in 2021 for investment purposes. We paid the higher rate of Stamp Duty as we both have our own properties. We are listed on the title as joint tenants (equal shares). 

My new partner has shown an interest in buying the flat. He has a Mortgage offer and to keep repayments affordable, he is going to purchase a 75% share and I will retain a 25% share. My ex partner will no longer have an interest in the flat. My name will be on the Mortgage and we will hold the property as tenents in common in unequal shares. We are going to sign a deed of trust to safeguard my interest. I will continue to reside in my own property. 

What Stamp duty, if any, is payable in this scenario?

Thanks

Islandguy said:

I don't know if this is relevant but flat is being sold for £220000. Mortgage is for £165000. I retain a 25% in the flat (£55000). New partner will live in flat as primary property, no other property owned. 

Some more information would help.  The flat is in England, so the relevant stamp duty is stamp duty land tax?

You own the other property you live in and will keep that one and remain living in it?

The transaction is being treated as a sale of the whole flat for £220,000 with:

• Your ex and you together being the seller?
• Your new partner and you together being the buyer?

That is required by the lender?

Hello. 

1. The flat is in England
2. I own the other property and will remain living there
3. The flat is being sold by myself and ex
4. The flat is being purchased by myself and new partner
5. The lender requires myself to be on the mortgage with my new partner 

SDLT_Geek

Islandguy said:

SDLT_Geek said:

Islandguy said:

Hello

Not sure if this subject matter has been raised before so apologies if it has. 

My ex partner and I purchased a flat in 2021 for investment purposes. We paid the higher rate of Stamp Duty as we both have our own properties. We are listed on the title as joint tenants (equal shares). 

My new partner has shown an interest in buying the flat. He has a Mortgage offer and to keep repayments affordable, he is going to purchase a 75% share and I will retain a 25% share. My ex partner will no longer have an interest in the flat. My name will be on the Mortgage and we will hold the property as tenents in common in unequal shares. We are going to sign a deed of trust to safeguard my interest. I will continue to reside in my own property. 

What Stamp duty, if any, is payable in this scenario?

Thanks

Islandguy said:

I don't know if this is relevant but flat is being sold for £220000. Mortgage is for £165000. I retain a 25% in the flat (£55000). New partner will live in flat as primary property, no other property owned. 

Some more information would help.  The flat is in England, so the relevant stamp duty is stamp duty land tax?

You own the other property you live in and will keep that one and remain living in it?

The transaction is being treated as a sale of the whole flat for £220,000 with:

• Your ex and you together being the seller?
• Your new partner and you together being the buyer?

That is required by the lender?

Hello. 

1. The flat is in England
2. I own the other property and will remain living there
3. The flat is being sold by myself and ex
4. The flat is being purchased by myself and new partner
5. The lender requires myself to be on the mortgage with my new partner 

It sounds as if the transfer is being documented as a purchase of the whole flat by yourself and your new partner for £220,000.  Because you own another property and do not count as replacing your main residence, then I would expect the higher rates for additional property to apply.  That means SDLT will be due at 3% (assuming no Budget changes affect you and it completes before 1 April 2025).  That means SDLT of £6,600.

The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT.

I am assuming that you and your new partner are not married or civil partners, I should have asked!

Islandguy

SDLT_Geek said:

Islandguy said:

SDLT_Geek said:

Islandguy said:

Hello

Not sure if this subject matter has been raised before so apologies if it has. 

My ex partner and I purchased a flat in 2021 for investment purposes. We paid the higher rate of Stamp Duty as we both have our own properties. We are listed on the title as joint tenants (equal shares). 

My new partner has shown an interest in buying the flat. He has a Mortgage offer and to keep repayments affordable, he is going to purchase a 75% share and I will retain a 25% share. My ex partner will no longer have an interest in the flat. My name will be on the Mortgage and we will hold the property as tenents in common in unequal shares. We are going to sign a deed of trust to safeguard my interest. I will continue to reside in my own property. 

What Stamp duty, if any, is payable in this scenario?

Thanks

Islandguy said:

I don't know if this is relevant but flat is being sold for £220000. Mortgage is for £165000. I retain a 25% in the flat (£55000). New partner will live in flat as primary property, no other property owned. 

Some more information would help.  The flat is in England, so the relevant stamp duty is stamp duty land tax?

You own the other property you live in and will keep that one and remain living in it?

The transaction is being treated as a sale of the whole flat for £220,000 with:

• Your ex and you together being the seller?
• Your new partner and you together being the buyer?

That is required by the lender?

Hello. 

1. The flat is in England
2. I own the other property and will remain living there
3. The flat is being sold by myself and ex
4. The flat is being purchased by myself and new partner
5. The lender requires myself to be on the mortgage with my new partner 

It sounds as if the transfer is being documented as a purchase of the whole flat by yourself and your new partner for £220,000.  Because you own another property and do not count as replacing your main residence, then I would expect the higher rates for additional property to apply.  That means SDLT will be due at 3% (assuming no Budget changes affect you and it completes before 1 April 2025).  That means SDLT of £6,600.

The SDLT would be different if it were possible to structure the transaction differently.  If it is done as your new partner buying the whole 50% share of your ex and a 25% share from you, so your new partner alone is the purchaser (presumably paying 75% of £220,000) then, on present rules it is arguable that no SDLT is payable, on the basis that your new partner is the only "purchaser" for SDLT.

I am assuming that you and your new partner are not married or civil partners, I should have asked!

Thanks for your help with this. No, we are not married or civil partners. Do you think we need to ask the solicitor for advice on this? I don't really understand why I have to pay Stamp duty a second time and why my new partner is penalised just because I have my own flat. 

sheramber

Once  you sell the flat it is no longer yours.

When you buy it with your new partner it is anew purchase.
You already own a property so this is a second property.

The rules state that if one person purchasing the property is due to pay the higher stamp duty charge, then payment is due on the whole purchase

You may have to pay the higher rates even if you intend to live in the property you’re buying (and regardless of whether or not you already own a residential property).

This is because the rules do not apply only to you (the buyer), but also to anyone you’re married to or buying with.

https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property

Islandguy

Thanks, is there a solution to this that would minimise the Stamp Duty liability? 

Bookworm105

Islandguy said:

Thanks, is there a solution to this that would minimise the Stamp Duty liability? 

get a divorce for your partner and do not buy as joint owners